- Australis Oil & Gas (ATS) is looking to raise more than $10 million to resume the leasing of mineral rights in the United States
- Around $8.17 million will be raised through a placement to sophisticated and institutional investors with another $2 million to come from a share purchase plan
- All of the shares will be issued at a price of five cents, which represents a 12.3 per cent discount to the company’s closing price on Wednesday, February 24
- In addition to the resumption of a lease arrangement, a portion of the proceeds will also be used for general working capital purposes
- Australis Oil & Gas is down 10.53 per cent to 5.1 cents per share
Australis Oil & Gas (ATS) is looking to raise more than $10 million to resume the leasing of mineral rights in the United States.
Around $8.17 million will be raised through a placement to sophisticated and institutional investors with another $2 million to come from a share purchase plan.
The placement will be completed in two tranches. Under the first, 150 million shares — equivalent to 15 per cent of the company’s outstanding capital — will be issued at a price of five cents each, which represents a 12.3 per cent discount to Australis’s closing price on Wednesday, February 24.
A further 13.5 million shares will be issued under a second tranche to the Directors of Australis, also at a price of $0.05 per share. Shareholder approval for this component will be sought at an annual general meeting in May.
According to the terms of the share purchase plan, eligible shareholders will be able to purchase up to $30,000 worth of shares, again at a price of five cents each.
The proceeds will be used primarily to recommence leasing of the Tuscaloosa Marine Shale (TMS) Core Area mineral rights, in which Australis operates 38 producing wells across 107,500 net acres.
A portion will also be used for general working capital purposes, including aiding negotiations with potential partners and accelerating existing debt repayments.
“The funds raised will assist in protecting the considerable asset value intrinsic to our holdings in the TMS,” said Jon Stewart, Chairman of Australis.
“With our Tier 1 production performance and associated revenues, material resource base, strengthened balance sheet and improving market conditions we are well positioned to engage with potential partners,” he added.
Australis Oil & Gas is down 10.53 per cent to 5.1 cents per share at 5:15pm AEDT.